Correlation Between Amazon and Fielmann Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Amazon and Fielmann Aktiengesellscha at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amazon and Fielmann Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amazon Inc and Fielmann Aktiengesellschaft, you can compare the effects of market volatilities on Amazon and Fielmann Aktiengesellscha and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amazon with a short position of Fielmann Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Fielmann Aktiengesellscha.

Diversification Opportunities for Amazon and Fielmann Aktiengesellscha

-0.84

Correlation Coefficient

Amazon  Fielmann Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between Amazon and Fielmann is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Fielmann Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fielmann Aktiengesellscha and Amazon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amazon Inc are associated (or correlated) with Fielmann Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fielmann Aktiengesellscha has no effect on the direction of Amazon i.e., Amazon and Fielmann Aktiengesellscha go up and down completely randomly.

Pair Corralation between Amazon and Fielmann Aktiengesellscha

Assuming the 90 days trading horizon Amazon Inc is expected to generate 1.43 times more return on investment than Fielmann Aktiengesellscha. However, Amazon is 1.43 times more volatile than Fielmann Aktiengesellschaft. It trades about 0.11 of its potential returns per unit of risk. Fielmann Aktiengesellschaft is currently generating about -0.03 per unit of risk. If you would invest  17,504  in Amazon Inc on September 19, 2024 and sell it today you would earn a total of  4,546  from holding Amazon Inc or generate 25.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.22%
Values	Daily Returns

Amazon Inc  vs.  Fielmann Aktiengesellschaft

Amazon Inc

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

Fielmann Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fielmann Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Amazon and Fielmann Aktiengesellscha

The main advantage of trading using opposite Amazon and Fielmann Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Fielmann Aktiengesellscha can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fielmann Aktiengesellscha will offset losses from the drop in Fielmann Aktiengesellscha's long position.

The idea behind Amazon Inc and Fielmann Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.